KTH Parts Industries — a Honda supplier that employs about 800 workers — is planning a $23 million to $36.5 million expansion that could add about 12 jobs, if it completes an incentive deal with Champaign County.
The company could build a $5 million to $8.5 million addition at its Johnson Twp. plant and invest between $18 million and $28 million in machinery and equipment at the site.
The company is seeking a 100 percent property tax abatement for the first 15 years of the expansion, said Marcia Bailey, economic development coordinator for the city of Urbana.
The agreement hasn’t been finalized, but Graham Local School Board members recently approved a community reinvestment area agreement for the project. Board members at the Ohio Hi-Point Career Center must also approve a similar abatement for the project.
It made sense for the Graham school board to approve the proposal if it will secure the company’s commitment to stay in the area, said Bob Hoover, treasurer at Graham Local Schools.
The company is the largest taxpayer in the school district, Hoover said, providing more than $381,000 in annual taxes.
School districts have an opportunity to sign off on any property tax abatement of more than 50 percent. Any deal must also be approved by a Community Reinvestment Area Committee and the Champaign County commissioners.
KTH produces auto body frame assemblies for Honda, and officially began production in 1985. The company started with about 150 employees, but now has grown to more than 800 workers. Officials at KTH declined to discuss the expansion plans this week.
The company’s expansion would include adding between 47,000 and 67,000 square feet to its current plant and between 40,000 to 50,000 square feet to an existing trailer yard at the site, Bailey said. The county’s proposed agreement with KTH would also require the business to create at least 12 new jobs.
“With all of the building, they would be able to expand their stamping capacity,” Bailey said.
The building project would take about two years and could be completed as early as April 2015, Bailey said.
A community reinvestment area, which has previously been approved for a portion of Johnson Twp., is a tool sometimes used by local governments that provides property tax exemptions for renovations or new construction.
“The intent is to bring more business to that area through a real estate tax abatement,” Bailey said.
Although the district won’t receive immediate tax benefits from the expansion, it is an investment in the district’s future, said Hoover of Graham schools.
Along with its St. Paris facility, KTH also has locations in Alabama and Ontario, Canada.
“If we don’t provide them a good reason to be here, they can move some place else,” Hoover said.
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